Yoma Strategic Holdings - RHB Invest 2016-10-26: Spins Off Tourism Assets into SHC; BUY Maintained

YOMA STRATEGIC HOLDINGS LTD Z59.SI

Yoma Strategic Holdings - Spins Off Tourism Assets into SHC; BUY Maintained

Yoma Strategic has announced a proposed listing of its tourism assets via a Reverse Take-Over (RTO) of Singapore Exchange-listed SHC Capital Asia Limited.
The transaction is expected to unlock a gain of $16m for Yoma.
We maintain BUY on the counter with unchanged TP of SGD0.78.

Yoma Strategic has announced a spin-off of its tourism-related business via a Reverse Take-Over (RTO) of SHC Capital Asia Limited, a SGX listed shell company.
The tourism-related businesses that will be spin off comprise of:
- The hot air balloon business 'Balloons over Bagan' which operates a total of 14 balloons.
- Pun Hlaing Lodge in Pun Hlaing Estate, and
- A parcel of land in Nyaung U in Bagan intended for the construction of a proposed commercial and tourism-related hospitality development.

SHC will simultaneously acquire additional tourism-related businesses in Myanmar comprising of Hpa-An Lodge, a hotel/lodge business and Asia Holidays, a Myanmar-based destination management company.
Following the proposed RTO, SHC will transform into a Myanmar-focused tourism company, which will be uniquely positioned to acquire, develop and operate new tourism-related assets in the country.

The proposed divestment of Yoma's tourism assets into SHC will unlock a gain of $16m, given the book value of $28m for assets under sale and a deemed market value of $44m.
SHC will issue consideration shares valued at an aggregate of SGD43.9m, giving Yoma a shareholding of 53.48% in SHC at an issue price of SGD0.263. Following the asset acquisition, SHC will have an initial market capitalisation of SGD82m. SHC intends to raise additional capital through a compliance placement to fund its expansion plans.
The latest transaction is in line with Yoma's decision to focus on its core businesses of property, automotive and consumer, while unlocking value from non-core assets through synergistic partnerships.
We maintain our BUY rating on the stock with unchanged TP of SGD0.78 based on SOTP valuation.

Goh Han Peng RHB Invest | http://www.rhbinvest.com.sg/ 2016-10-26

RHB Invest SGX Stock Analyst Report BUY Maintain BUY 0.78 Same 0.780